Pakistan’s foreign exchange reserves fell to a five-year low in January 2019 when they were at $6.6 billion but have now nearly doubled to $12.7 billion as of this August.
Pakistan’s depleting dollar reserves were one of the main challenges for the PTI when it came into power in August 2018. Within its first six months, the PTI government saw the dollar reserves down to a level that was barely enough to pay for two months of imports.
To tackle this challenge, Prime Minister Imran Khan’s government signed a $6 billion bailout with the International Monetary Fund (IMF).
The increase in dollar reserves in fiscal year 2019-20 can be attributed to dollar inflows caused by the signing of the IMF programme, which opened more doors for Pakistan as the World Bank, ADB and AIIB also pledged support.
According to the IMF, the programme was supposed to unlock funding of $38 billion from multilateral donors.